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U.S. Policy Toward Russia

Speakers: Gary Hart, Co-Chair, The Commission On U.S. Policy Toward Russia, Graham Allison (Via Videoconference), Director, Belfer Center For Science And International Affairs, Maurice R. Greenberg, Chairman And Chief Executive Officer, C.V. Starr & Company, Inc., and Dimitri Simes, President, The Nixon Center
Moderator: Peter L.W. Osnos, Founder And Editor-At-Large, Public Affairs
April 9, 2009

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PETER OSNOS:  Welcome.  Thank you all for coming.  Good afternoon. It's good to see that Russia can still draw a crowd.

This is an on-the-record session this afternoon.  We're going to go through -- please turn off your cell phones, pagers and   defibrillators.  (Laughter.)  We're going to go through -- we have a plan, which may or may not -- oh, I can see it.  The seat is empty.

What we're going to do is we're going to start this afternoon's discussion based on this report jointly released by the Belfer Center at Harvard and the Nixon Center.  We're going to start with an executive summary by the chair of the group, Senator Hart.  We're then going to hear in sequential order, first from Graham, should he arrive, and Mr. Greenberg is going to talk about the economic issues. Graham is going to talk about arms control.  And Dimitri Simes will talk about the Russian domestic political issues as they apply to the judgment of this report.  Then we'll have a conversation up here about some of the things that I think are pertinent.

We are, after all, now one generation removed from the Soviet Union.  It's a chance to sort of look at the perspective of how time has actually affected the former Soviet Union and its empire.  And then we'll go to the questions from the floor.  We're going to finish promptly at 2:00.

So without further ado, I think you all have the biographies.  I won't take the time to introduce Senator Hart and Mr. Greenberg, Dimitri, and Graham when he arrives.  But I think you know you've got an estimable group here and you'll be able to get a good sense where we are.

So, Senator Hart, why don't you start off?

GARY HART:  Peter, thank you.  And thanks to the Council for its hospitality.  We appreciate very much this platform and all of you for attending.

Many months ago, a number of us began to talk to each other across party lines and disciplines about the state of U.S.-Russian relations and whether it was what it should be.  In anticipation of a new administration and changes in Congress, we thought to discuss among ourselves, given quite a lot of experience in both the public and private sectors in the former Soviet Union and in Russia, about what ought to be done.

We had, of course, no idea who the next president or administration should be, who would be managing our foreign policy, or what their own predispositions would be.  In any case, we felt obliged to try to pool our experience, if not also our wisdom, and provide guidance and recommendations to the new administration and its policymakers.

We had two principles that united us, again, across party lines and across ideologies, and that was that the United States and Russia had many more interests in common than we had in opposition; and second, following on that, that it was in the interest of the United States to improve the relationship and, in doing so, not hold Russia to expectations that were unrealistic as a condition for improving those relations.  We have 19 recommendations.  And again, these are the result of months and months of discussion and deliberation, finally culminating a few weeks ago in briefings to key policymakers in the new administration, a trip to Moscow 10 or 14 days ago, which included meetings with President Medvedev and senior officials of the Russian government, and coming back to brief the secretary of State, Secretary Clinton.

Those recommendations are collected under several headings. First and foremost is the issue of arms control and arms reduction. We clearly have mutual interests in that regard.  We are the two dominant nuclear powers on earth by orders of magnitude and cannot expect the rest of the world to control and reduce arms unless our two nations lead.  And we have considerable discussion about how that should be done, starting with the continuation of the existing START treaty that culminates later this year.

Second are mutual interests regionally, in the Middle East, particularly with regard to Iran, Southeast Asia with regard to Afghanistan, and Northeast Asia with regard to North Korea.  We also believe that Russia has a role to play in resolving working our way out of economic turmoil, given its rich resources, and relationships with Western Europe in terms of energy.  And finally, and perhaps also most obviously, is a mutual interest in controlling terrorism.  The Russians have had their share of that, as have we.

What we have done is prepare a report, which is available to all of you, and I hope you have had a chance to get it, and we lead with those 19 recommendations pretty specifically.  And before deferring to Mr. Greenberg on the final two most contentious political issues, we urge the new administration not to proceed with any degree of acceleration in expanding NATO, particularly where Ukraine and Georgia are concerned, and to try to, in effect, start over again on missile defense to see whether or not there is some constructive approach to missile defense that can be shared by both of our nations.

OSNOS:  Wonderful.

Graham, can you hear us?

GRAHAM ALLISON:  I can hear you and I can see you.

OSNOS:  You look terrific.  Do you want to give us an executive summary on the arms control issues, as reflected in the report?

ALLISON:  I think Gary has set the issue up just right.  I make three points.

First, from the so-called reset, I think that our report says begin with clarity about American national interests and a hierarchy of American national interests.  Priorities is obviously something    Americans don't do.  The priorities mean something that is more than something else.

And in our view, what matters most to the U.S. is our survival and well-being, and we judge that Russian cooperation, deep Russian cooperation, is essential to protecting America's vital interests in preventing nuclear terrorism, preventing nuclear proliferation, preventing nuclear war.

So to put it provocatively, Georgia is important.  Russian democratization is important.  But neither of those is as important as engaging deep Russian cooperation in preventing actions like nuclear terrorism that could be disruptive to us.  And if that seems too -- (inaudible) -- or too obvious, let me be provocative and say I think this is actually contrary to the conventional wisdom in both political parties when we started this undertaking, as Gary said.

It's contrary to conventional wisdom at the Council on Foreign Relations, if I take their 2006 report, or the last issue of Foreign Affairs, or it's contrary to The Washington Post, if you take their editorial page and Applebaum's piece on Obama's reset, which he says is, quote, "a deeply misleading, even vapid metaphor for diplomatic relations."  I'd say we disagree even though our argument was developed before Biden picked this metaphor.

Secondly, on the nuclear agenda, I'd say we are very much on the same page with the Obama speech on Saturday in Prague.  We say the next phase -- we recommend the next phase of arms control negotiated agreements that would further reduce U.S. and Russian Cold War nuclear arsenals with an appropriate verification regime, something the Bush administration was reluctant to do but something we think was foolishly delayed and should now be done.

Secondly, we say that's not the end of the nuclear security agenda; that, in fact, locking down and cleaning out material worldwide is an urgent undertaking.  Obama said, in his speech on Saturday, that this is a -- he's setting a four-year timetable for this.  That's a very ambitious agenda but consistent with what we recommended, because the simple truth is no fissile material, no mushroom cloud, no nuclear terrorism.  So our best hope is to prevent terrorists getting the means for achieving their deadliest aspiration.

And finally, third, on missile defense.  There, we basically agreed with the position that Bob Gates had taken in the administration earlier and which he's articulated more clearly after the election, namely that missile defense deployments in Poland and the Czech Republic are a threat-based undertaking, so not theological, not bureaucratically driven, not for the purpose of sticking our finger in Russia's eyes but because these could be a defense against an Iranian nuclear missile.  But as he points out, if it were possible to blunt or block Iran's development of a nuclear weapon, then obviously that would commensurately reduce the need for missile defenses.  So this is not a matter so much of linkage as it is of logic.  And that's what we say in the report, and that's what we believe.

OSNOS:  Thanks, Graham.

Mr. Greenberg.

MAURICE GREENBERG:  Well, I think, as Senator Hart and Allison covered a great deal of the topic, what impressed me, everyone we met with, from Medvedev, the general's staff, national security advisers, head of the central bank, all wanted to improve relations with the United States.  It was unanimous.  There wasn't any doubt in those discussions, which was very obviously what we wanted to hear.  But there was great sincerity in the way it was being said, which I think, you know, provides the opportunity, I think, for the first time in many, many years that we can have a constructive relationship with Russia.

Part of the problem, I think, is that those in the West keep on thinking that Russia is the Soviet Union and those in the Soviet Union keep thinking they are the Soviet Union.  And I think it's important that we get that straight and they get that straight.  And I think that can make a big difference.

On the economic side, Russia is in terrible economic site.  The ruble is obviously depreciated.  There's been a flight of currency from Russia.  The banks are having a very difficult time.  It's a really one-and-a-half product economy -- oil and the sale of bombs. Oil prices down where they are makes it very difficult to balance a budget.  If this goes on for a couple of years, they're going to be a borrower from someplace.  They had a bad experience with the IMF previously.  I doubt that's where they want to borrow next time out. But it's a problem.  Construction has come to virtually a standstill in Moscow where before it was booming just a couple of years ago.  On the other hand, day-to-day living in Moscow -- we weren't outside of the city -- the restaurants are still filled, life doesn't seem to have changed (on the surface ?) yet.  But they have great potential in Russia once the world economy straightens out and if we have a better relationship. I'm optimistic about that.

OSNOS:  Dimitri on the domestic politics.

DMITRI SIMES:  When we decided to proceed with the report, we had quite a discussion about the role of Russian domestic situation.  And we basically came to the conclusion, actually to two conclusions. First, that because we felt quite strongly that what we were recommending was in the U.S. national interest, what was happening inside Russia was not that irrelevant to our case.  Our second conclusion, however, was that we are not going to say anything positive about what is happening inside Russia.  And that is because clearly there are a lot of things that were witnessed there today that -- how to put it -- would not pass at least my personal smell test.

Three points.  First, clearly, Russia today is not a democracy in any way we understand it.  Clearly, they have the parliament and the media, particularly TV, which are fully controlled by the government. And clearly, there are legal procedures -- well, I should say presidents have described them quite appropriately as legal nihilism.  But so far, we have seen a lot of positive rhetoric on President Medvedev's part, but not much action.

The second thing which we have seen, and which may complicate having a new beginning in the U.S.-Russian relationship, is a real power-sharing between Medvedev and Putin.  A lot of people here assume that Medvedev is a little more than a puppet.  As Senator Hart and Hank Greenberg have said, that's not what we have seen.  That's not the way Medvedev was treated at all.  And they are not just talking about public appearances.  We talked to associates of both of the leaders, and we got a very strong sense that Medvedev really matters.

What is the exact dynamic between Putin and Medvedev?  It's hard to judge if for no other reason that most of their conversations take place at one of their residences without anybody else being present, and then they come forward with one position.  The bottom line is that Medvedev definitely sounds today as the leader of Russia, and he is treated publicly, including by Putin, as the leader of Russia.  In the meetings of the Security Council, Medvedev at the head of the table and Putin is at his side.

However, we also were told that for Medvedev to enjoy this kind of respect and at least to receive authority, he has to be very careful not to alienate Putin, particularly on foreign policy matters. And -- (inaudible) -- Medvedev makes a statement which sounds quite positive and then something else comes from members of his cabinet and    then eventually from Medvedev himself.  And we do not quite know the mechanics behind these changes, but my impression is that zig-zags reflect a delicate maneuvering between Medvedev and Putin and particularly between their teams where already you can see a considerable degree of jealousy.

The final point I want to make is about (ethnic ?) republics inside Russia, particularly about Chechnya.  We have seen yet another situation a couple of days ago of a leading Chechnyan commander who actually was hero of Russia, and he was assassinated in Dubai, and Russian citizens were arrested with some very prominent connections, both in Moscow and in the Chechnyan capital, Grozny.  And the question is, how is thing still happening?  My impression is that you have to start with an assumption that the separatists in Chechnya have won. The whole Chechen government is run by former rebel commanders.  There is not a single exception.  Anyone who was loyal to Moscow during the first Russian-Chechen war was removed from the Chechen government. Senior federal officials who play a role in Chechnya tried to restrain Chechen President Kadyrov, and they always failed.  They were not supported by Putin and Medvedev.  And actually, there were cases when they were physically assaulted in Chechnya.

So what we see is that Moscow, who made an unsavory deal with Chechen rebel commanders, essentially allowed them to run Chechnya as they wish, as long as they remain loyal to Moscow.  How long this loyalty will last if there would be economic shortages and Moscow would not be able to satisfy their economic ambitions?  I do not know.

And one final point.  The good news is that the financial crisis clearly has tamed Moscow's ambitions or at least their capabilities. The bad news is that they are looking for scapegoats, and we are the one.  (Laughs.)

HART:  Speak for yourself.  (Laughs.)

OSNOS:  One of the -- thank you, that was wonderfully succinct and exactly what we hoped for in this part of the discussion which, after all, is on the record.  And there are, as I looked at the list, there are Russian reporters in this room.

So my first question is, what are they going to think in Moscow when they hear the way you characterized this report?  Are they going to say, wait a minute, is that what they really meant to tell us?  Is that the message that they really meant to convey to us?

HART:  I don't think we've said anything here that we didn't say in Moscow 10 days ago, two weeks ago.  We were very direct and very forthcoming.  Some agitates may have changed, but the substance of our discussions were pretty much what all of us have said here.

OSNOS:  So your sense of dealing with the Russians is that they have enough self-confidence now to accept a kind of blunt or frank or open discussion of the relationship between the U.S. and Russia at this point, that is characterized by what you all have said?

HART:  Well, yes, but I think they're still puzzled by the animosity that continues toward them, or at least did up until a few months ago, from this side, as am I.

OSNOS:  Well, pick up on that point.  You were beginning your work in the latter days of the Bush administration and concluding your work in the early period of the Obama administration.  What do you think the impact is of the change in Washington or the beginning of the changes in Washington?  I think that would be very -- (inaudible) -- now that the Medvedev --

GREENBERG:  I think it's very positive.  I think the meeting that the foreign minister had with Hillary Clinton was positive.  It's going to lead to a visit, I'm told, by the president to Russia sometime this summer.  So it was very positive.  And I think what we're saying is everything that we were engaged in discussions with.  There was no holding back.  It was quite evident that they would like to have an improved relationship, and I believe we should, too.

OSNOS:  Did they express to you -- did they ask you the kinds of leading questions that you might expect Russians of all kinds to ask about this new administration -- what's really different?  After all, a lot of the people were around in the Clinton years, after -- we have a president who doesn't have a lot of experience in foreign affairs, so his critics have said.  So what was their level of curiosity or expectation about what they've had -- what they've seen?

And, Graham, if you want to pipe up, just raise your finger, or whatever it is --

ALLISON:  Sure.  Just a short point on that.  I would say the main thing that they were overjoyed about was that the new administration was "not Bush."  (Laughter.)  Medvedev was actually quite dismissive of what he called "the lost years" -- the last couple of years -- and he said twice one of the things he would miss least was lectures from Condi Rice.  (Laughter.)

So, basically, their reading of the last recent years -- the last few years is that it's been an objective of the U.S. to make their life more difficult, and so anything other than Bush would look better.  I think they are enthusiastic enough that they're unrealistic, and they'll end up being disappointed somewhat.

HART:  You know, it takes something like Jackson-Vanik, which we've talked about for years repealing, as a prelude for Russia getting into WTO.  It's been talked about and talked about, and promised to the Russians, yet never been fulfilled.  And, you know --

OSNOS:  Jackson-Vanik was passed, if I'm not mistaken, in 1972 (sic) --

HART:  Yeah.

GREENBERG:  -- (197)4. Well, a long time ago.

OSNOS:  Right.

GREENBERG:  A long time ago.  And yet there it sits on our books.  And it seems to me one of the first things we ought to think about doing is getting it repealed so as a show of goodwill and getting Russia into WTO.

OSNOS:  Does somebody want to just -- for those of us who -- for those of the audience who may not remember 1974, can you just give   us a sentence on what Jackson-Vanik is and why it would still be on the books, in any way?

GREENBERG:  I think I'll ask my father here to do that. (Laughter.)

SIMES:  Well, I will -- I will tell you what it is.  I think that Senator Hart can explain better why it is still on the books. (Laughter.)

It was passed -- it's clearly called Jackson-Vanik, and the principal driving force was Senator Henry Jackson and, more specifically, his then-foreign policy adviser Richard Perle.  And the idea was to link "Most-Favored Nation" status for Russia -- in terms of preferential tariff treatment in the United States -- to link it to freedom of immigration from the Soviet Union.

And, of course, the Communism have collapsed 18 years ago.  Even under Gorbachev, Russia became free in terms of immigration controls. They are none today.  So, if you look substantively, it's very difficult to explain why the amendment is still there.

I was accompanying President Nixon to Moscow I 1992 (sic).  In my presence -- Ed Cox is here, President Nixon's son-in-law -- in my presence, President Nixon told Boris Yeltsin -- I had lunch with President Bush -- that was Bush I -- and he told me that they are going to get rid of the Jackson-Vanik amendment.  And then, of course, the same assurances were given with the Clinton administration, and then George W. administration.  So, why is the amendment --

OSNOS:  So, why is it still there?

HART:  Well, it must be pointed out that I live in Kittredge, Colorado, which means, by definition, that I am unsophisticated in terms of foreign policy.

OSNOS:  Really?  (Laughter.)

HART:  (Laughs.)  Graham was laughing.  When you ask senior officials in our government or senior people in the foreign policy community why it's still there, they say because Congress insists on it.  But no one, to my knowledge, has ever given a name in Congress -- I don't know anybody in Congress who is in favor of Jackson-Vanik, with one possible exception.

And I just am so unsophisticated that I think any policy that can't be justified is probably wrong.  And I would like --

OSNOS:  Or at least irrelevant.  I mean, the notion of restricted immigration from Russia, it seems to me, is truly archaic in the context of -- but, the grandchildren of people who left in '72, or --

HART:  Right.   But, some mysterious Congress is prohibiting its elimination.  And yet you can't find anyone to step forward and say, "it's me, and I insist on this for the following six reasons."

And so, therefore, I think it's a phony policy that is perpetrated by cowardice.  Aside from that, I have no strong feeling. (Laughter.)

OSNOS:  Your leaning at -- (laughter) --

ALLISON:  Can I give you one line on it?

OSNOS:  Yeah.

ALLISON:  One of our interlocutors was a Russian Jewish oligarch.  And as he pointed out, he said, this is such an interesting anachronism because now more Jews are coming from Israel to Russia -- wanting to come back to Russia -- than are going from Russia to Israel; and, secondly, that Israel is one of the few countries we can go to without a visa.

OSNOS:  It is, after all, as Dmitri said, 18 years since the end of the Soviet Union, and 20 years, this year, since the fall of the Berlin Wall.  I mean, that is a significant period of time -- a generation already.

Where do you think Russia is now, compared to where you might have imagined it would have been in the period between 1989 and (1999 ?)?  What kind of society has emerged out of the rubble?  All those years we spent saying, get rid of the Soviet Union, tear down this Wall -- all right, Soviet Union's gone, Wall's gone, what have we got?

HART:  Well, Mr. Greenberg has pointed out the impact of oil prices on that society, and it's profound.  It was a society booming -- Moscow was the most expensive city on earth when oil prices were $140 a barrel; my guess is it's less expensive now.  And a state of shock somewhat exists, not just in Russia but throughout the world, because of chaos in markets, and so forth.

So I think the first word I would use is "confusion" as to where Russia is.  But, I think a very important aspect of Russian politics and culture -- as in every country on earth, is generational.  And I would imagine -- and I don't think you can generalize about 70-year- old Russians that would also apply to 30-year-old Russians.

So, I think you've got an awful lot of things change in our society, as generations move on, and I think we've got to apply some of that same understanding to Russia.  The younger generation of Russians are much more cosmopolitan, much more internationalist, much more understanding of markets and commerce and finance than their counterparts that are 50 years or older.

OSNOS:  But, Dimitri, as you --

GREENBERG:  I think that's right.  I think that's exactly right.

And I think there is some confusion.  You know, there's a love- hate relationship in many ways.  They like a lot of things that are American, but they don't understand our hostility in other areas. They don't understand why we want to put missiles into Poland and Czech.  They don't understand why we want to drive Ukraine into NATO, or why we took the position we did with Georgia.  There's some confusion about that.

And I think that -- I think one of the problems is we don't have a ready, ongoing dialogue with Russia at the highest levels.  That would avoid so much of the misunderstanding that exists.  That's critical.  We have to get that established.

OSNOS:  Dimitri, as you were describing the Putin- Medvedev relationship, I was inserting, in my mind, Brezhnev and Kosygin -- you know, the same kind of slightly opaque set of political power centers that existed into Soviet era.

How do you characterize power now, that it's not what you -- you know, there isn't really an opposition, of consequence, that seems to have any true voice.  So, how do you measure power in today's Russia?

SIMES:  Well, of course, Kosygin was not appointed by Brezhnev.  They came to power together.  Medvedev was groomed and was appointed by Putin --

OSNOS:  But, he wasn't really truly elected in the -- he didn't have to go through two years' worth of primaries and raise $1 billion in --

SIMES:  No, I said that he was appointed by Putin.

But, you know, once you are appointed to that kind of enormous monarchical position, how you got it is less relevant than you "have it."  And president has enormous constitutional powers in Russia.  And to Putin's credit, he treated Medvedev with considerable deference.

You cannot find a single occurrence when Putin have criticized Medvedev or in any way diminished him.  It seems as a genuine partnership.  And it's a genuine partnership which is clearly not an easy one.  And as I have mentioned, their subordinates are clearly already envious of each other, and the economic crisis makes it more difficult to have this duality of power.

But, so far, I have to say Putin was quite supportive of Medvedev, and Medvedev clearly was careful not to cross certain lines with Putin.

OSNOS:  Graham, how do you -- go ahead.

HART:  I can almost guarantee you, behind closed doors in Moscow -- if not today, then yesterday or tomorrow, discussions are being held as to who's making foreign policy in the United States, Barack Obama or Bill and Hillary Clinton?  (Laughter.)

OSNOS:  All right.  Graham, you after all were very much involved in arms control issues in the Soviet era and you -- some of the language you used in your description of what needs to be done now again reminded me of very capital language that was used a generation ago after all.  How do you think on the arms control issues things have changed in this new order from what it was in the past?

ALLISON:  Well that's a good question and a big one.  Just briefly I'd say the -- when you ask why does Russia matter, the first place to stop is pause and think Russia's the only country that can unilaterally decide to take an action that will erase the U.S. from the map.  Now that's a Cold War legacy but it remains a fact.

Secondly, Russia, as Gary said earlier, and the U.S. continue to hold 95 percent of the nuclear weapons and material.  So in that one dimension, Russia remains the U.S. counterpart and a superpower in the sense that a nation that can cause us to disappear, we have to be extremely interested in.

Russia is also a crucial player if we're to prevent Iran, for example, from getting its nuclear bomb.  So the agenda that evolved over the period of the Cold War first to have a strategic stability in the U.S./Russian nuclear relationship, and then secondly with the non- proliferation treaty, to try to prevent the spread of nuclear weapons and then post the disappearance of the Soviet Union, the possibility of weapons or materials getting in the hands of terrorists, that agenda still remains there.  I think the Bush administration for reasons that would be a longer discussion, went off on some tangents with respect to that, and I think Obama's coming back to what's been pretty centrist, sensible mainstream.

And in articulating ambitious objectives here, we have to look and see why have things not moved faster and more successfully over the past eight years or indeed over the past you know, 18 years since the end of the Soviet Union.  And partly that's a matter of hard work. Partly it's because we haven't got ourselves well organized for pursuing it and giving it the priority it deserves.

HART:  Yeah, but don't you think -- we had a chance of doing that during the Yeltsin administration and we missed doing that.  We took a much -- we did not -- from Russia's point of view, did not do the things that we could've done and treated them almost as a non- entity.  We had a chance and that we missed.  I hope we don't miss this chance.

OSNOS:  It essentially had been two previous eras to this one and the 20 years or so of modern Russia.  One was the Yeltsin era in which you had the sort of openness, chaotic, financial, economic and political situation.  Then you had the Putin years where things were going in this direction, at least as far as the economy's concerned, and much of the openness of the society was shut down.

So where do you see this next, is it the Medvedev Putin era, where do you see it going on those big issues of open society, you know, the development of a real economy other than the oil and so forth?  Do you think we're in a new era, or are they still trying to assert themselves absent the crash of the oil prices?

GREENBERG:  I don't think we're in a new era, I think that it's not -- there's not going to be a dramatic change that's going to come about slowly, but Russia has to diversify its economy.  They know that.  But that means opening up the economy more than they have to date.

Joint ventures are hard to do.  The legal system is very uncertain.  You've got to have an environment that's attractive to foreign investment before you get foreign investment.  And you have to be able to rely on -- on a law.  But it's going to come.  It's going to come more slowly but it's going to come.  It has to if Russia is going to develop at all.

And I think if we have the political side on a better track, I think it would give impetus to getting that done much faster.  I think that Russia has tremendous potential on the -- certainly on the human side.  They've got great scientists, they've got technology, they've got many things that I think would benefit joint ventures, and I think that's going to happen.

HART:  I agree to the degree -- it's wrong to look at Russia kind of in a test tube.  A lot of -- to the degree their progress will depend on their relationship with us and the Western world.  And I do think we missed a chance in the '90s to bring Russia into the West. Now, we couldn't unilaterally do that, but I think the Europeans were much more willing to do that than we were, despite ancient animosities and conflicts.

And we missed that chance -- we could go into the reasons why later.   But the more Russia feels both its leadership and its educated citizenry, particularly the young people, that they are welcome in the West, they have friends in the United States and that they are being treated as a serious nation with a rich culture and history, the more they will relax.

And so it's almost a chicken-and-egg problem.  The more we keep them at arm's length, the more isolated they feel, the more they are going to behave in ways that we don't like.

GREENBERG:  Look, I've going to Russia since 1964.  I've had many businesses in Russia -- in fact built the largest foreign life insurance company in Russia.  So there's a lot you can do if you take the time to understand how to do business in Russia, despite all the political issues that existed at the time.  And so you can do it.

SIMES:  Well, I have lived in Russia in 1964, actually until 1973 and I think the differences are profound.  I would not call Russia an open society today, at least not the way we understand open societies.  But in terms of personal freedoms, they are very much there.  And they were not -- (inaudible) -- under Putin.  If you are talking about freedom to select your place of employment, including working for foreign companies; if you are talking about your freedom to travel; if you are talking about freedom of artistic experimentation with forms and shapes, those freedoms are there.  And you need to give people time to become accustomed to those freedoms before they start demanding real political freedoms.

During the Yeltsin period, we talked about Russian democracy, but actually the vast majority of Russian people who were against Yeltsin's radical economic experiments.  So Yeltsin was using his authority to do what his population was clearly unprepared to do.  The reason Putin and Medvedev are relatively popular is because they are much more in tune with their own people, even if they don't grant them complete political freedoms.

OSNOS:  Graham, do you want to add something here?

ALLISON:  Yes.  Peter, I think your question about what the next era looks like is a good one, and nobody knows.  But I think the Medvedev-Putin regime in the next phase will be importantly shaped by their response to the global economic crisis which, as Hank emphasized at the outset, is much more severe there than elsewhere.

So either they're going to decide that their best hope is to integrate more fully into the global economy, including the World Trade Organization, that's theory one; or theory two, blame the outsiders for the crisis and try to survive somehow as a petro state. I think the jury is out on that.

If you look -- I mean I watched carefully and I thought one of the most interesting conversations we had was with the head of the central bank.  They think they're managing to survive right now, but they think if this goes on for another year, they can almost feel 1998 when they were wiped out the last time and 1991 before that.  And for the active mobile emerging middle class, that can even be politically destabilizing.

So I think the economic issue was one to watch and I think that's why we're at a pretty crucial juncture here where a U.S. and Western willingness to engage them with respect and what they say taking their interests into account, may make a difference at this -- you know, as they sort of straddle between the one and the other.

OSNO:  We're at the point now where we're going to go to the floor for questions.  Usual rules apply.  Please state your name and affiliation, keep it to a crisp question with a question mark at the end of it.  And over there, yeah.  Wait for the mike because the last --

QUESTIONER:  Jamie Rubin (sp).  One of their interests is nuclear power and one of your recommendations is very positive about nuclear power.

In the context of Iran, could those of you who are particularly arms control oriented, describe to us why it appears the Russians have a higher tolerance for Iran's nuclear program than we do, and whether American politics will permit a large expansion in nuclear power as a controlled nuclear power as an export and a positive good in a U.S./Russian relationship?

OSNOS:  Who wants to start?  Graham?

GREENBERG:  Graham and then I'll make a comment.

OSNOS:  Sure.

ALLISON:  Very good question, Jamie.  On nuclear energy, this is the civilian use of nuclear energy plants to produce electricity.

In a greenhouse gas-constrained world, nuclear energy has got to be one of the seven wedges going forward.  That'll mean a significant expansion of nuclear energy.  And in that, the U.S. and Russia have a great opportunity.

Actually, Russia, if we get this 1-2-3 agreement through and if Russia and the U.S. became more deeply engaged, we could even have joint U.S.-Russian ventures in both the supply of nuclear reactors, but most importantly in the nuclear fuel cycle component, particularly the nuclear spent fuel.

On Iran, there's a lot of misunderstanding, I think.  I would say first, with respect to the Bushehr reactor, having a nuclear power plant in Iran has essentially zero effect on Iran's getting nuclear weapons.  It's not zero, but approximately zero.

Number two, what's dangerous is the fuel cycle that is enriching uranium, which can either be used for fuel for the reactor or, if enriched to 90 percent, can be used for bombs, and similarly, reprocessing the spent fuel to create plutonium.

The Russians have offered and the Iranians have accepted an ideal, almost poster-child package, which is a 10-year deal in which all the fuel for Bushehr will be supplied by Russia; all the spent fuel will be taken back to Russia.  If that were a general operating principle for reactors other places in the world, we would be fine.

Thirdly, with respect to Iran's nuclear ambitions, both Putin and the chief of the general staff and the head of the security council were very clear that Iran's acquiring nuclear weapons was a serious threat to them.  As one of them said, there are many more targets in the arc of a current Iranian missile in Russia than there are -- there are none in the U.S. and where the U.S. has interests.

So I think what we've not done is engaged in a joint assessment of the threat in which we listen to their views as well as tell them our views, and then the development of a joint strategy for doing something about it.  Their judgment has been right along -- and Lavrov has been in the front of this, the foreign minister -- that the policies we were adopting and advancing in the Bush administration were failing and were destined to fail, so they weren't a strategy for accomplishing the objective.  And as it turns out, that's pretty much the way the world worked.  If you were to try to have a different conclusion, you were going to have to have a different strategy.  Now, at this point, whether there's a strategy that can succeed with the -- (inaudible) -- options that we have, now that Iran has already crossed the threshold of technological know-how for enriching uranium and it's actually enriched enough stuff for their nuclear bomb in low-enriched uranium if it was run back through the enrichment process, it's going to be a challenge for the Obama administration.

But I think about their sense that this is a serious threat to them and that, if we were engaging with them in developing a serious strategy for doing something about it, they would be prepared to play, I would say that's correct.  Whether, at this stage, there's a strategy that'll be successful, we'll have to wait and see.

GREENBERG:  Graham's exactly right.  This is a classic example where our interests coincide and we can decouple arms production from energy production.  The last I counted or heard, the Russian -- I think it's called the RBMK class reactor, which was the Chernobyl reactor, they've got a dozen to two dozen or more still operating.  That's a very dangerous technology.  They need to replace it.

They have not made a whole lot of progress scientifically on that since, nor have we since Three Mile Island.  But I think the two countries together could develop a safe nuclear energy production industry and, in effect, license it through other countries, and at the same time decouple that from arms production.

OSNOS:  On every trip that I've made to Moscow in the last several years, many with Dimitri, I have visited with Lavrov, the foreign minister, and asked him directly, "Would Russia permit Iran to have nuclear weapons?"  And he unhesitatingly has always said, "No."

SIMES:  Well, when we had a meeting with President Medvedev, I was absolutely struck by how graphic was his language in discussing the Iranian what he called nuclear missile program.

OSNOS:  Yes.

SIMES:  And there was no question that he was very, very concerned.  What they're prepared to do about it, that's a different question.  And first of all, as Senator Hart said quite correctly, if they, to support sanctions, they want to be a part of the decision- making process, not just to be told the decision was already made elsewhere.

We also have to understand something very simple.  We do not like Indian nuclear weapons or Pakistani nuclear weapons, but because we have different relations with India than with Iran, we don't consider Indian nuclear weapons as an immediate -- (inaudible) -- threat.

Russia has a different relationship with Iran, from the beginning of the Islamic republic.  So while they'd agree with American assessment of the threat, they don't have naturally the same sense of urgency.  To bring them to the same page, I completely agree.  We have to work together, and they have to feel that they offer benefits of partnership with the United States.

OSNOS:  Is it your impression that it's commonly understood in Washington that the Russians would not permit the Iranians to develop nuclear weapons?  Is that commonly understood?  And if --

GREENBERG:  I'd put it another way.  They will do all they can to prevent it, up to perhaps a point.  I mean, I don't think we're qualified to say they will carry out bombing raids on Iran, which your question implies.

OSNOS:  Well, that was sort of what I heard you saying, though.  They said, "We will not permit," or words to that effect. And that implies that there's a point beyond which they will not permit --

GREENBERG:  Well, I think they believe that they could prevent them, by talking to them, diplomacy, that they would have far more influence than anybody else would have.

OSNOS:  Right.

Questions?  Over here, yeah.

QUESTIONER:  Lindsay Howard, (NGO ?) Group.

A question about economics, economic drivers of arms control.  To what degree does the Russian trade deficit with Iran drive some of those decisions?  And also, to what degree does the great expense of arms control, controlling nuclear arms, reprocessing and other things, contribute to this equation?  The U.S. has paid a great deal for the past treaties, something completely underappreciated by current generations.  But to put anything back on track and to open a new chapter in history, how would this commission advise approaching those issues?

OSNOS:  I think, Allison, you've been on that more than I have.

ALLISON:  I think the Nunn-Lugar cooperative threat reduction program has been investing more than a billion dollars a year every year since 1991, and now it's about a billion and a half, in securing and eliminating Russian nuclear weapons and materials.

Most people don't appreciate what a fantastic success this has been.  I mean, there's a lot of things that remain to be done.  In fact, if you go back to the Bratislava agreement of Putin and Bush in February of 2005, the beginning of the second term of the Bush administration, they agreed at Bratislava on a very ambitious set of objectives for securing Russian weapons and materials and completed that work plan in December.  So I'd say that's an unsung recognition or insufficiently recognized accomplishment of the Bush administration in this space.

In the arms control arena, I think actually the current Russian economic crisis, appropriately dealt with by us, may allow or certainly incentivizes them to be interested in more substantial cuts in strategic nuclear arms and others.  And I think that's very much in our interest.  So I think that's a positive background for the negotiations that Obama and Medvedev announced will now go forward towards the negotiation of a new treaty that would be signed before December when the current START treaty and its verification procedures expire.

HART:  The other factor is, as Mr. Greenberg said, their two principal exports are oil and weapons.  And if we say you can't sell weapons, as we should -- we shouldn't sell weapons either, but we do -- it would be helpful for them to have other things to export.  And that's back to where the domestic energy production technology, where we could help with -- we could work together and make that a principal Russian export.

OSNOS:  Yeah.

QUESTIONER:  Bob Lifton.

During your trip there, did the question come up of Israeli unilateral action with respect to Iran and how the Russians might react to that, given their desire to see a cessation on the part of Iran in developing nuclear weapons?

OSNOS:  Dimitri.

GREENBERG:  I don't recall --

SIMES:  Not during our discussions during the trip.  But as you may remember, when we saw Lavrov last time, he said specifically that they really are terrified by the notion of nuclear-armed Iran, but they were more terrified by the notion of Israeli attack on Iran and what it may lead to.

OSNOS:  Jeff.

QUESTIONER:  Jeff Laurenti with the Century Foundation.

My question asks if you could both look at the internal -- or tell us about the internal dynamics of the commission and then a bit of external because in -- Americologists in Russia are looking at this will be parsing every word and wondering why on arms control it talks about a serious dialogue but not about deep reductions or why on the missiles in Prague or Poland talks about taking a new look but not halting work or how with regard to the democracy-human rights nexus, it talks in an almost Kissengerian realism about respecting Russia's history and traditions which would seem to be czarist, Stalinist, giant exception.  Could you tell us what --

GREENBERG:  Also Tolstoy, Dostoefsky -- (laughter) -- Rochmaninov --

(Cross talk.)

QUESTIONER:  Could you tell us a bit about the dynamic within the commission about what an Americologist would want to see as what are the restraining forces, because you did have a bipartisan mix from left to right.  And is there a good deal of caution within this that suggests that the center of gravity is not really as far as Obama is? And then externally how much do you think that Medvedev's commitment to so-called rule of law will actually have any traction within the power centers within Russia?  Does he really have any influence on the security services and all that?  What are the prospects there and what can the outside world do to facilitate that?

OSNOS:  So that's essentially two questions.  So --

GREENBERG:  Or four of five.  (Laughter).  All of them good.

OSNOS:  So we're --

GREENBERG:  Well it seems to me to try and embrace all the things that you've outlined in one commission report, we'd still be meeting for the next two or three years.  So you had to look at, you know, what are the dynamics between us and the Russians now?  How do we get that relationship back on track?

We as a commission can't change Russian society or any of the domestic politics.  What we can try and do is identify the issues between our nations that keep us from moving forward with a more constructive relationship.  If we can get that done, we've achieved a great deal.  OSNOS:  Anybody else want to add -- what about the second part of the question?  Second half of the question.

ALLISON:  Peter?

GREENBERG:  Well --

OSNOS:  Yes, Graham?  Graham, you wanted to say something?

ALLISON:  Go ahead, Gary.

HART:  Graham, go ahead.

ALLISON:  I think it's a very good question and we've had a long time to answer but obviously there are dynamics within such a group.  But take the three sort of issues at the top of the agenda, the views of the commission as expressed are quite different than the conventional wisdom or mainstream conventional wisdom in either the Democratic or the Republican party last summer.

So first arms control.  Back to the high table, mean negotiated agreement with verification procedures, a la Reagan's trust but verify.  McCain was arguing kick Russia out of the G-8 and don't deal with them almost like Bush.  The Democrats were almost at the same place.

Secondly, missile defense, and the deployment of missile defenses in Poland, Czech Republic.  The Bush administration pushed forward under all conditions.  The commission view, stop, take a new look and take account of the proposition that this should be a threat-based exercise.  That's fundamentally different.  That's where Obama is now, that's where Gates was before, that's not where the Bush administration was, that's not where the two parties were before.

Thirdly, a back door or fast track for Georgia or Ukraine in the NATO.  At the last NATO meeting the Bush administration continued pushing for that, a totally unrealistic objective since there was some adult supervision in both the case of Germany and France.  And in an alliance that operates by consensus, it simply wasn't going to happen. So the commission report says wake up, say the fact this is not going to happen.  Be concerned about the security of Ukraine and Georgia but note they had -- they'll meet the criteria for membership in NATO so that's not going to happen.  I think that's -- those are three cases where even though you could save a little more sharply on one side or a little more sharply on the other side, I think the main message of the commission is pretty clear.

SIMES:  I completely agree with the main message.   But please be assured that we had a very involved dialogue including -- (inaudible) -- control issues.  And Senator Hart would tell you how he had to have conference calls with commission members, I shouldn't say negotiating every comma, but pretty close to that.  So the fact that    we were able to come with this kind of punch I think is an accomplishment.

In terms of in a sense being a kind of Stalinist respect for nation sovereignty -- of course, Stalin believed very much -- at least articulated his belief in his Communist cause and was not particularly hesitant to mess with other governments.  So I kind of saw that we were even more true to the legacy of founding fathers.  (Laughter).

HART:  Many of us are veterans of commissions and it's in the nature of commissions, particularly broad based ones, to seek the least common denominator to get consensus.  We could have issued a more cutting report and had dissenting views.  Eight of us agree to this proposition rather more bold than perhaps as what's in here, but then six others would've said no we disagree.

So as with a commission that I co-chaired with Warren Rudman, we felt consensus was more important than staking out even bolder positions.  But having said that and with due respect to our hosts here today, if you put this report down beside the Council on Foreign Relations report on U.S./Russian relations, if you don't see the difference, I'll eat your hat.  (Laughter).

SIMES:  Well I have to say that, however, if you would look at the composition of the commission -- which included Mr. Greenberg, which included Pete Peterson, which included Karl Hughes -- and if you would look at members of the old Council commission and our commission, there was a great deal overlap.  So I would say it was not only a different commission but it was a new environment and a new sense of American priorities.

OSNOS:  Sir?

QUESTIONER:  Roger Perkins (sp), retired lawyer.  Your comments on the relationship between Medvedev and Putin are extremely interesting and I think extremely important.  Question one, did you ever meet with Medvedev alone where Putin did not come into the meeting?

HART:  Yes.

QUESTIONER:  Yes?

HART:  Mr. Putin was not in our meeting with President Medvedev.

OSNOS:  Did you see Putin, you know, separately?

HART:  We did not.

SIMES:  No.

QUESTIONER:  And secondly, I heard the new, relatively new, chief justice of Russia, Anton Ivanov, the other day here in New York, with whom I was greatly impressed and I've been impressed with Medvedev's comments and use of the term rule of law which you've referred to. Did he himself use that expression again or give any sense to you that reinstating a rule of law was important to Medvedev?

HART:  I've heard him use that expression.  It was reported in numerous media reports, and I believe he sincerely believes it. Whether or not it'll be implemented the way he believes in it is another matter.

OSNOS:  You were saying before we came in that Putin's position has been substantially effected by this very severe setback in the economy that he's now the prime minister -- whatever he thought he was going to be, it's his problem, or at least he's now the one who's in charge of the economy and therefore --

Now what effect do you -- did you -- could you sense that?  Does that in a sense give Medvedev more stature because it's not his problem when Putin left or is that a concept of the divine?

HART:  That's Kremlinology that I think we weren't there long enough to penetrate.  But back to the original question Mr. Putin got off I think one of the best lines politically in the last six months when he said on the issue of their interest in Eastern Europe, we did not invent the Monroe Doctrine.  (Laughter).

OSNOS:  Graham, you wanted to say something?

MR. ALLISWON:  I think your question is very much on target and goes back to Dimitri's comments about this odd couple.  I've watched them maneuvering pretty carefully.  If you look at Putin's press conference two days ago, he clearly has taken responsibility for the economy as the prime minister, and Medvedev is very keen -- like whenever he has an opportunity if you look at the nuance, he emphasizes that this is the responsibility of Prime Minister Putin and the government.  So I would say that hot potato is in Putin's lap.  I think Russia has an extremely difficult hand to play.  And I think if and as things go badly, this'll likely impact this odd couple.

OSNOS:  Mm hmm.

HART:  I agree with that.

OSNOS:  Okay.  Back there.

QUESTIONER:  James Sitrick of Baker & Mackenzie, LLP.  In terms of the rule of law, did you have any opportunity or did you wish to raise with Mr. Medvedev or others the Litvinenko poisonings in London, the Khordokovsky trial or trials and the name -- I can't remember, it's a long complicated name -- of the female journalist who was murdered in her apartment?  Did those questions or issue arise at all during your discussions or did you choose to stay away from them for harmony's sake?

GREENBERG:  Didn't arise at any meetings that we were at. And we didn't raise it.

SIMES:  We were, of course, presenting our report and telling them about our conclusions, to a large extent, in order to get their reaction and bring their reaction back to administration policymakers.

Having said that, we of course at different times -- including recently -- had meetings with Russian senior officials, including with Prime Minister Putin.  We had meetings with Mr. Medvedev in the past when he was chief of presidential administration.

And at many of these meetings were raised the Khodorkovsky case. We did not raise -- at least I never raised with them the Litvinenko case, because this is a much more complex case with many more unknowns.  But in terms of Khodorkovsky, many of us privately have expressed our point of view, and it's well known among Russians officials -- how to put it -- the Khodorkovsky case, to put it mildly, does not help their image in Washington and in the West in general.

GREENBERG:  I raised the Khodorkovsky issue with Putin several years ago in a one-on-one discussion when Primakov was with me.

OSNOS:  And?

GREENBERG:  And --

OSNOS:  He said, "I'm going to release him immediately." (Laughter.)

GREENBERG:  He took about an hour to explain.  And really, essentially, said there was an agreement among all the oligarchs that he had with him that they would -- that he would not take their ill- gotten gains away from them if they kept their money out of politics. And they had all agreed with that -- including at that time, supposedly, Khodorkovsky.

He then had a change of mind and had ambitions that were political and was using his money, supposedly, that way.  And since he broke the rule, he paid the price.

OSNOS:  Ted Sorenson, did you have a question?

QUESTIONER:  I'm Ted Sorenson, Paul Weiss.

And I'm grateful for all the wisdom and information that's been imparted by the stars on stage -- in fact, stage and screen. (Laughter.)  I have not been able to read the report, nor have I been back to Moscow for quite a long time.  I formerly went there quite often.  But -- and I'm coming to a question.  I do have a strong sense that there is still a segment of the Russian population that has a yearning for what they regard as the "good old days", which we regard as the "bad old days".  There is a yearning for the fact that they were once feared and therefore respected and therefore given attention and a position of equality on the world stage.

I think Putin, in many ways, represents and champions that sentiment inside Russia.  He has power.  And as Graham and others pointed out, the Russians are a nuclear power and that is a potentially dangerous streak -- that desire to be feared and respected.  It had a little bit to do with the Soviets going into Cuba 47 years ago.

And I'm just wondering whether that psychology factor -- I know Kremlinology is pooh-poohed, but I'm just wondering whether that psychological factor should be considered along with the more tangible and instructional factors that you've been talking about.

HART:  It's not a single strain in modern, 21st century Russia.  It's an amalgam -- it seems to me, at least, and Dmitri can comment on this -- of old communists who are, by virtue of human biology, moving on; nationalists -- both virulent and dangerous nationalists and legitimate nationalists; and a broader group of people who simply want respect and who don't necessarily acquaint that with arms or invasions or military power.  And I would think that third group is overwhelmingly the larger part of those who want us and the rest of the world to treat them with more respect than they've received.

Now, many of them understand they have to earn that by their behavior and by their policies, but I think it's wrong to equate -- to put everybody in that narrower and more dangerous category of ultranationalists who are more or less viciously anti-Western.

OSNOS:  Anybody want to just add briefly to that?

Go ahead.

ALLISON:  Just a quickie.

I think Gary or Ted's question puts it exactly right.  That we don't appreciate the psychology of Russia and the turbulence of the last 20 years.

But for Putin, as he likes to say, the greatest geopolitical tragedy of the 20th century was the collapse of the Soviet Union.  We call that victory in the Cold War.

So they're going through a post-imperial traumatic transition from -- that's taken them back to their borders of Catherine the Great.  When the French went through that they were engaged with    Algeria.  When the British went through that we saw India, Pakistan, then Suez.  So I think we have to appreciate the way that plays in the minds of so many people.

Fortunately, Medvedev -- as he likes to say -- is a post-Cold War president.  When the Soviet Union disappeared, he was an assistant to the mayor in St. Petersburg.  So he's not so much into this.  But I think in trying to -- the importance of treating them with respect and taking their interests into account will help them through -- I don't know -- post-imperial transition without too many crises.

OSNOS:  And that will be the last word.  Thank you all very much.  (Applause.)

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